Anti Avoidance Rules

Question 1

What do we need to consider if someone has told us that they may consider starting up a new trade after ceasing to trade another one

Answer 1

So something like this should immediately flag up to us as a potential Targeted Anti Avoidance Rule (TAAR). This is something we will need to consider if they were reconsidering starting a new trade within 2 years of the original cessation. In this event, we will want to consider if the following apply:

1. The new trade/activity is similar to that of the initial trade that was ceased
2. Was the main purpose of ceasing to trade to avoid income tax implications

if they are to be caught under these rules then they will be charged as income distributions on the original disposal